The improved budget deal agreed between the Scottish Government and the Green party has failed to bridge the funding gap and Highland Council remains in a “challenging” position.
The Highland Council settlement is much lower than hoped for but includes new powers that allow the council to levy a range of new taxes and charges:
- A transient visitor levy or so-called tourist tax
- A workplace parking levy for additional charges placed on private car parks
- Raising the council tax cap from three per cent to almost five per cent
- And plastic bag tax will go up from 5p to 10p.
Budget leader Alister Mackinnon rejected claims the local authority was due to get “a funding package worth up to an extra
£8.6 million” saying it will receive an additional £4.228 million.
Mr Mackinnon said despite allowing a “little more flexibility” the council is still “faced with a very challenging budget situation.”
“Further to receiving detailed information yesterday evening, we now have a more accurate picture of what this means for Highland.
“The new settlement provides £4.228 million in additional cash, contrary to other figures reported. This gives us a little more flexibility, but still leaves us faced with a very challenging budget situation.
“We now need to consider how we can best use this money, bearing in mind our reserves are below the recommended amount and we have considerable risk moving forward in future years.
“The government have also now given local authorities the ability to raise additional money from charging communities higher council tax, by lifting the cap above three per cent.
“We have had a lot of feedback from the public about income generation, but we are aware of many household’s already with stretched financial circumstances. So we will need to carefully consider now to what extent we should use this power. We plan to launch our consultation on the tourist levy later in February as agreed by council in December,” he said.
The Convention of Scottish Local Authorities (Cosla) was more upbeat about the budget developments and the new devolved powers but its president councillor Alison Evison acknowledged that the budget deal still left a gap in the finances that local authorities would have to bridge.
“Whilst challenges still remain, and today’s movement from Scottish Government clearly doesn’t mitigate all of our funding issues, we are now in a better place than we were with the original budget proposal.
“I welcome the commitment today to the introduction of discretionary taxation (transient visitor tax) and the workplace parking levy – it is right that local authorities across Scotland should be able to raise revenue locally to address local issues,” she said.
Highland Labour MSP Rhoda Grant said: “This is not good news for Highlands and Islands’ councils because there will still be cuts and still be job losses. There will also be tax cuts for high earners too while ordinary council tax payers face more increases.
“Add to that our university and colleges, which are already struggling, are facing more cuts. It’s a good lesson in spin from the SNP government and the Greens.”